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Joined Apr 1, 2010
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The Rural Folk and the South Will Rise to Wal-Mart’s Rescue, Once Again

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While I am being a bit facetious with my title, the serious issue presented here is whether a “screaming buy” is found in Wal-Mart’s current stock price. If you look at Wal-Mart over the past decade or so, you can see that the stock has gone literally nowhere. Value players like Karen Finerman have had their patience tested with the non-performance of the stock to the point where we do not hear much from them about WMT anymore. Old Man Buffett still owns Wal-Mart, but even he does not discuss the global retail mega-store famous for low prices.¬†We also know that there is considerable competition with Wal-Mart’s prices from other online retailers nowadays.

As will always be the case with fundamental arguments, you are going to have to ask yourself at what point the market has baked it into the cake. The aggravating factors against owning Wal-Mart have highly likely contributed to the fact that the stock has been the epitome of dead money since 2000. With the monthly Bollinger Bands pressed tightly together, along with most of those monthly moving averages converging to a point, Sam Walton’s pride and joy is ready for a big move. Of course, we all want to know in which direction that big move will be. To be sure, the tight price action tends to favor the bulls, as opposed to loose and sloppy patterns and heavy selling volume which favor a bearish outcome.

If you believe that Wal-Mart will be a continued American icon and thriving global business as the 21st century progresses, then we are probably near or at an excellent long-term buy point.

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8 comments

  1. ruggyup

    And, if loose and sloppy patterns apply as well to stores, people, inventory and shopping experience then maybe any buy signal are mitigated by life experience.

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  2. Juiceyfruit

    good eye there, C&doubleya

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  3. Yogi & Boo Boo

    I’m not so sure. They’ve lost way by abandoning their customers needs while lusting after the more upscale “Tarjay” shoppers. Since the start of the last recession, many competitors have moved into their turf and lured many formerly loyal $WMT customers away.

    Several years ago, while I was actively auto racing, we had a saying that if you couldn’t find it in a Walmart Super Center, you didn’t need it. Recent trips to local stores, show reduced SKU’s, and even common items no longer available. Their market is being attacked by deep general discounters like $FDO, deep food discounters like privately held Aldi/Trader Joe’s and and a slew of regional food discounters like Price Rite in the northeast, and on automotive geegaws with aggressive retailers like $AZO and $AAP.

    The chart does look very good, but methinks they slaughtered their golden goose when their customer base needed them most.

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  4. vegastrader

    I think Walmart is having trouble trying to figure out their new role.

    1) They are getting killed by Amazon on Clothes, shoes, Books, Electronics and other stuff.

    2) They have cut number of sku’s dramatically

    3) They are often out of stock of remaning items.

    4) They are no longer the price leader in the food department. Dollar stores, Fresh and Easy, Trader Joes and regular super markets Kroger, Vons, Albertson are fighting back with better deals.

    5) Service. What service?

    6) Competition from Target or Tarchee

    7) Future union, health benefits issues

    Lot of headwinds

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  5. Highsurf

    I went to WalMart and they didn’t have either Gold Bond powder or Corn Nuts. They’re dead to me.

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